Which of the Following Statements Is Correct

question 6

Multiple Choice

Which of the following statements is correct?

• A) The number of dummy variables that must be added to a regression model is one less than the number of categories for a qualitative independent variable.
• B) A dummy variable is incorporated into a regression model if the dependent variable is qualitative.
• C) Including a dummy variable into a regression model will simplify the regression results and help people to interpret the meaning of the regression parameters.
• D) The number of dummy variables that must be added to a regression model is one more than the number of categories for a qualitative independent variable.
• E) All of these.

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Definitions:

Liquidation Expense

Costs incurred during the process of winding up a company, including legal, administrative, and sale expenses to dispose of the company's assets.

Unsecured Creditors

Creditors who have extended credit without any specific property (collateral) pledged as security for payment.

Liabilities

Financial obligations or debts a company owes to others, which must be settled over time.

Payments

Transactions in which money is transferred from one party to another, often in exchange for goods or services.